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BoE-Pricing Softens Further, Richening Extends As Curve Bull Steepens

GILTS

Gilts continue to grind higher on the session, with fresh highs recently registered, leaving the contract +70 or so.

  • Softer BoE-dated OIS pricing allows the front end of the curve to outperform, with the major cash benchmarks running 5-8bp richer.
  • BoE-dated OIS moves 4-11bp lower on the session as the strip flattens.
  • ~24bp of tightening is now showing for next month’s MPC meeting, the first foray below fully pricing 25bp of tightening since the labour market report delivered firmer than expected wage data mid-August.
  • Terminal policy rate pricing shows below 5.80%.
MNI London Bureau | +44 0203-865-3809 | anthony.barton@marketnews.com

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